Postmates and Uber Eats use DoorDash tipping fallout as an opportunity to build trust with customers
DoorDash’s tipping scandal has given competitors in the food delivery service industry an opportunity to take a shot at the market leader.
Both Postmates and Uber Eats sent emails to their userbases this week, reassuring customers that delivery people at both companies receive 100 percent of customer tips—a transparent move that attempts to clear up their own tipping policies and show care for delivery workers.
The delivery services are reacting to the fallout from DoorDash’s tipping scandal this week. Although DoorDash’s tipping policy had been highly-scrutinized by its delivery people for months, a New York Times article highlighted the policy on July 21 after reporter Andy Newman tested out being a food app deliveryman for a day. Newman addressed how the delivery app did not pay out his entire tip. He reported that DoorDash has been using tips to help subsidize their workers’ base pay, a practice that has been common in the restaurant industry for years. On Tuesday night, the company reversed its tipping model in response to a slew of negative reaction, and says it now gives workers all tips earned.
DoorDash currently sits at the top of the market. According to a March report from Edison Trends, DoorDash owns 27.6 percent of the market, followed by Grubhub, which owns 26.7 percent and Uber Eats, which owns 25.2 percent. The backlash directed at DoorDash gave Postmates and Uber Eats a window to simultaneously one-up the leading food delivery app, which is valued at $7.1 billion. Both Postmates and Uber Eats also were mentioned in the New York Times article but each company was quick to make their policies clear and address any concerns customers might have.
In Postmates’ email sent on Wednesday, the company stressed its focus on its workforce, saying its delivery people have received all their tips since the company was founded seven years ago.
“Over the last few days, there has been a lot of confusion about how third-party delivery companies handle tips, so we thought it was important to remind our customers that 100% of their tips are always passed along to the courier,” a Postmates spokesperson wrote in an emailed statement explaining why the company sent the email. “We pride ourselves on being transparent, so we never want our customers to question where their tips are going.”
Uber Eats sent an email on Tuesday that had similar language and reiterated how important delivery people are to the company.
The day before the Uber Eats email was sent out, Daniel Danker, head of driver at Uber, commented on how both Uber drivers and UberEats delivery people receive all of their tips.
DoorDash has not responded to Ad Age's request for reaction to competitor emails.
Both Postmates and Uber Eats have their tipping policies on their sites, but as earnings information for their workers that is not directed to customers who are using the app to tip. In a time where customer concerns expect brands to listen and respond quickly to consumer concerns, marketers know that it is important for companies to clear up confusion as soon as possible.
“Postmates and Uber Eats need to ensure that their customer base is absolutely clear on their respective tipping models,” says Alice Fournier, newly appointed senior vp of digital commerce at activation and shopper marketing agency Geometry. “While this might have always been important, it is especially crucial in the current context where tech companies are getting increasingly challenged by consumers, on multiple fronts. In that kind of reality, questions are best addressed proactively ahead of becoming potential issues.”